BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     SB 471


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          Date of Hearing:  July 13, 2015


                       ASSEMBLY COMMITTEE ON NATURAL RESOURCES


                                 Das Williams, Chair


          SB  
          471 (Pavley) - As Amended June 2, 2015


          SENATE VOTE:  Not relevant


          SUBJECT:  Water, energy, and reduction of greenhouse gas  
          emissions: planning.


          SUMMARY:  This bill specifies that reductions of greenhouse gas  
          (GHG) emissions associated with the water sector, including  
          water use, supply, and treatment, are eligible investments from  
          the Greenhouse Gas Reduction Fund (GGRF).  Requires the  
          California Energy Commission (CEC) to study water-related energy  
          use in California.  Requires the State Water Resources Control  
          Board (SWRCB) to develop a grant and loan program to fund  
          projects that result in water-related GHG emission reductions.


          EXISTING LAW, under the California Global Warming Solutions Act  
          of 2006 (AB 32): 


          1)Requires the California Air Resources Board (ARB) to adopt GHG  
            emissions reduction measures to achieve a reduction in  
            statewide GHG emsisions to the 1990 level.  

          2)Requires ARB to prepare and approve a Scoping Plan, on or  








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            before January 1, 2009 and once every five years thereafter,  
            for achieving the maximum technologically feasible and  
            cost-effective reductions in GHG emissions from sources of  
            emissions by 2020.  



          3)Establishes the GGRF in the State Treasury;  requires all  
            funds, except for fines and penalties, collected pursuant to a  
            market-based mechanism be deposited in the GGRF; and, requires  
            the Department of Finance, in consultation with ARB and any  
            other relevant state agency, to develop a three-year  
            investment plan for the GGRF. 





          4)Requires that the GGRF be used to facilitate GHG emissions  
            reductions in this state consistent with AB 32.  Requires that  
            annual budget appropriations from the GGRF be consistent with  
            the investment plan.

          THIS BILL:  


          1)States legislative intent relating to the nexus between water,  
            energy, and GHG emission reductions.

          2)Specifies that reductions of GHG emissions associated with the  
            water sector, including water use, supply, and treatment, are  
            eligible investments from the GGRF. 

          3)Requires CEC, in cooperation with the State Water Resources  
            Control Board (SWRCB), ARB, the Public Utilities Commission  
            (PUC), and the Department of Water Resources (DWR), to conduct  
            a study of water-related energy use in the state.  In  
            conducting the study, requires CEC to: 









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             a)   Hold a minimum of two public workshops to allow input  
               from stakeholders; 

             b)   Include any source-specific data; and, 

             c)   Identify existing data gaps.  

          4)Requires SWRCB, in cooperation with CEC, ARB, PUC, and DWR, to  
            establish a grant and loan program for water projects that  
            result in the net reduction of water-related GHG emissions.  

          5)Establishes the following categories for grant funding: 

             a)   Precision irrigation;

             b)   Infrastructure improvements that will help deliver  
               on-demand water for precision application; 

             c)   Local water solutions that reduce net energy use; 

             d)   Clean energy generation in the water sector; 

             e)   Leak detection; 

             f)   Water appliance efficiency; and,

             g)   Water monitoring software.  

          6)Requires that any public funds made available for the program  
            to private water companies regulated by the PUC be used for  
            the benefit of ratepayers or the public.  

          7)Authorizes SWRCB to adopt guidelines and regulations necessary  
            to implement the bill.  

          FISCAL EFFECT:  Unknown


          COMMENTS:  








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          1)Author's statement. 


               Some of [the state's] water-energy related climate  
               pollution is already covered by the state's cap-and-trade  
               program by the electricity generation sector.  However,  
               water suppliers, treaters, distributors, and end users  
               currently lack the information and opportunity to do their  
               part in advancing our climate and water conservation goals.  
                As a result, a variety of projects that might reduce  
               climate pollution from the water system do not currently  
               qualify for project funding from the GGRF.  



               SB 471 will establish a program to allow a variety of water  
               projects to qualify for funding from the GGRF, provided  
               these projects reduce emissions in furtherance of our state  
               climate goals.  

          2)Water and energy use.  According to the CEC, water-related  
            energy use in California consumes approximately 20% of the  
            state's electricity and 30% of the state's non-power plant  
            natural gas (natural gas not used to produce electricity).   
            The water sector uses electricity to pump, treat, transport,  
            deliver, and heat water.  The CEC also found that the most  
            energy-intensive uses of water in California are associated  
            with end uses by the customer (e.g., heating, processing, and  
            pressurizing water), and  75% of the electricity and nearly  
            all of the natural gas use related to water in California is  
            associated with water heating.  Additionally, expected  
            increases in groundwater pumping, water treatment, and water  
            recycling, due to drought conditions in the state, mean the  
            energy intensity of water will likely increase.


          3)Executive Order.  Executive Order B-29-15 (Brown), issued  








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            April 1, 2015, directed state agencies to perform various  
            actions regarding saving water to respond to severe drought  
            conditions in the state, including directing the CEC, jointly  
            with DWR, to implement a Water Energy Technology program to  
            deploy innovative water management technologies that achieve  
            water and energy savings and GHG emissions reductions.  The  
            Executive Order also directed the CEC, jointly with DWR, to  
            implement a limited statewide appliance rebate program for  
            inefficient appliances. 


          4)Funding for water and GHG emissions.  Emergency drought relief  
            legislation, SB 103 (Budget Committee, Chapter 2, Statutes of  
            2014) appropriated $10 million to the California Department of  
            Food and Agriculture (CDFA) for water and energy efficiency  
            projects in the agricultural sector, and $30 million to DWR to  
            implement a grant program to support local water-use  
            efficiency projects and energy efficiency projects at State  
            Water Project facilities. 



          The 2014-15 Budget allocates $832 million in GGRF revenues to a  
            variety of transportation, energy, and resources programs  
            aimed at reducing GHG emissions.  Various agencies are in the  
            process of implementing this funding.  The budget agreement  
            specifies how the state will allocate most cap-and-trade  
            auction revenues in 2015-16 and beyond.  For all future  
            revenues, the legislation appropriates 25% for the state's  
            high-speed rail project, 20% for affordable housing and  
            sustainable communities grants, 10% to intercity capital rail  
            projects, and 5% for low-carbon transit operations.  The  
            remaining 40% is available for annual appropriation by the  
            Legislature.

          Of that 40% available for annual appropriation, the Governor's  
            proposed 2015-16 cap-and-trade expenditures would appropriate  
            $60 million to DWR and CDFA for water and energy efficiency  
            projects, $30 million to CEC and DWR for rebates to replace  








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            inefficient appliances, and $30 million to CEC and DWR for the  
            Water and Energy Technology Program, as described in the  
            Executive Order.  
          5)Drought funding.  In response to California's ongoing drought,  
            AB 91 (Budget and Fiscal Review), Chapter 1, Statutes of 2015  
            allocated just over $1 billion for drought-related activities.  
             Among other things, this bill: 


             a)   Accelerates a $131.7 million appropriation to SWRCB to  
               fund water recycling projects, including feasibility  
               studies, demonstration projects, and larger scale water  
               recycling projects.  



             b)   Accelerates a $135.5 million appropriation to SWRCB to  
               improve access to drinking water for disadvantaged  
               communities and help small communities pay for wastewater  
               treatment.  


             c)   Accelerates a $20 million appropriation from the GGRF to  
               DWR for state and local water use efficiency programs that  
               reduce GHG emissions.  


             d)   Appropriates $10 million from the GGRF to CDFA for  
               agricultural water efficiency projects that reduce GHG  
               emissions.  


          6)Suggested amendments.  The author's office intends for the  
            grant and loan program to be funded by the GGRF; however, the  
            bill does not specify a funding source or appropriate any  
            funds.  The committee may wish to amend the bill to specify  
            that the program shall be funded upon appropriation by the  
            Legislature from the GGRF.  









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          For clarity, the committee may wish to amend the bill to clarify  
            that grants and loans are available for in-state projects.  

          REGISTERED SUPPORT / OPPOSITION:




          Support


          California Association of Sanitation Agencies


          California Coastkeeper Alliance


          California League of Conservation Voters


          California Municipal Utilities Association


          City of Agoura Hills, Mayor Weber


          City of Pasadena's Water and Power Department


          Clean Water Action


          Coastal Environment Rights Foundation


          East Bay Municipal Utility District









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          Humboldt Baykeeper


          Inland Empire Waterkeeper


          Klamath Riverkeeper


          LA River Revitalization Corporation


          Las Virgenes Municipal Water District


          Los Angeles Waterkeeper


          Mono Lake Committee


          Monterey Coastkeeper


          Orange County Coastkeeper


          Russian Riverkeeper


          San Diego Coastkeeper


          San Francisco Baykeeper


          San Luis Obispo Coastkeeper









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          Santa Barbara Channelkeeper


          Sonoma County Water Agency


          Southern California Edison


          The Climate Registry


          The Energy Coalition


          The River Project


          TreePeople


          Union of Concerned Scientists


          USGBC


          U.S. Green Building Council


          Union of Concerned Scientists


          Ventura Coastkeeper












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          Opposition


          None on file




          Analysis Prepared by:Elizabeth MacMillan / NAT. RES. / (916)  
          319-2092